A wide range of issues drew buying from the opening of Tuesday’s trading as investors took heart from overnight rises in European and USA shares and the yen’s drop against the dollar, brokers said. But Tuesday’s drop in the yen saw it erase gains made after the shock Brexit vote on June 23.
Advertisement
The greenback fell as low as 99 yen on June 24 in the aftermath of Britain’s decision to leave the European Union, which drove investors to the Japanese currency and other safe havens.
Despite concerns over a stagnant economy, 18 and 19 year olds getting the right to vote for the first time, and many citizens having reservations about a more militarized Japan – Japanese voters felt Prime Minister Abe is doing a satisfactory job as leader and still have faith in Abenomics. Boeing rose $1.95, or 1.5 percent, to $132.04 and Citigroup added 31 cents, or 0.7 percent, to $42.29.
The government is likely to submit a supplementary budget plan to an extraordinary Diet session expected to be convened this autumn. Economists worry, however, that Abe’s focus on public works spending will not tackle the structural issues around a declining population and workforce. Ishihara said he would start discussions on the package’s size.
Ruling party sources had told Reuters before the election that the government was ready to spend more than 10 trillion yen.
Traders are preparing for the release this week of data on Chinese economic growth and trade, hoping the world’s number two economy will show signs that a long-running slowdown is bottoming out. The BOJ has kept monetary policy steady since January, when it made a decision to add negative rates to its massive asset-buying program in a fresh attempt to accelerate inflation. The Bank of Japan also cut its inflation forecasts, boosting expectations that there could also be an easing of monetary policy at July’s policy meeting. “Bernanke, who initiated QE3, is visiting the BOJ, inflating markets with expectations that the BOJ is accompanying the fiscal stimulus with ultra-loose policies”, said Hans Redeker, head of currency strategy at Morgan Stanley. It was last up 1.9 percent at 115.82 yen. Benchmarks in Taiwan, New Zealand and Southeast Asia also posted gains.
Advertisement
The pound and euro gained as investors welcomed news that Theresa May will succeed David Cameron as prime minister of the United Kingdom after Andrea Leadsom pulled out of the race on Monday.
